Sunday, February 28, 2016

Renewable energy sector in trouble




THE PERSISTENT DECLINE in oil prices might have proven an economic blessing for Barbados. But for the renewable energy sector it has become a nightmare as companies providing installations ponder whether it is worth it to stay in business.

Customers who invested in grid-tied systems in tandem with Barbados Light & Power (BL&P), the island’s Canadian-owned monopoly, are also now finding even when they produce more energy, which has to be sold to the grid, than they consume, it is just not worth it. Add this to a pull-back of interest from some consumers and you have a scenario where critics of the decision by the Fair Trading Commission to tie payment for energy produced from the sun to fossil fuel rates are more convinced than ever that the system needs to be revamped urgently.

Shawn, whose full name is withheld, says customers who are faced with rates that are in favour of the electricity company to the extent that he has ended up producing more energy than he consumed and yet had to pay. So, rather than making money from the excess he finds he has a bill. He pointed to a monthly bill where he generated an average of 6.4 kilowatts daily from his solar photo voltaic system and averaged usage of 2.7 kilowatts.

For him the investment simply does not add up. This, at a time when Government has indicated support for an eventual 100 per cent renewable energy economy and forecasts of expanded uptake by renewable energy customers to reduce a burgeoning oil import bill. Prominent businessman Ralph “Bizzy” Williams, who champions renewable energy and has invested millions of dollars in a sector for which he has a passion “...We in Barbados have to sell our electricity generated from the sun that requires no foreign exchange to generate at a price that is lower than the price that we have to buy it back from the Light & Power. It’s not fair...” laments Williams, who has his eyes on establishing a $6 million megawatt solar farm in Cane Garden, St Thomas.
It makes no business sense to a small Bridgetown entrepreneur such as Shawn, it makes no sense to local and possibly foreign independent power producers, it makes no sense to perpetuate a system whose flaws are forecast.

Clearly, we know now from reality the method of using a fossil fuel model to pay for renewable energy makes no business sense. That investors cannot be interested in a sector where they are constrained on their generation of energy, how they use excess capacity and a business climate transformed not only by regulatory and policy shortcomings but global energy output and power struggles, should also be obvious.
Only one interested party appears to be smiling all the way to the bank – BL&P.
But to cast blame on the monopoly energy supplier would be unfair, as that company does not make nor implement Government’s energy policy, nor does it regulate itself, nor does it have any control over the global oil battle involving Washington, Beijing, Moscow and the Middle Eastern oil producers.

Fixing all that is wrong with the regulated pricing mechanism by swiping a lightning sabre out of Star Wars imagery, though desired, cannot be accomplished in short order. Not in an environment of governmental silos.
But Government must now recognise that “hastening slowly” on a pricing mechanism what is unfair to small investors, consumers, big business and big investors is no longer valid.

Hence, the need for some urgent tweaking and consideration of a clear, near term road map or policy on the renewable energy sector.





Original Post:News N

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